Merkel urges Bulgaria to seek new talks with Putin on South Stream

BERLIN, Dec 15 (Reuters) - German Chancellor Angela Merkel
backed Bulgaria on Monday in its bid to seek new talks with
Russia about the South Stream gas pipeline after Moscow shelved
the project this month in favour of an alternative link via
Turkey.

The EU, at odds with Moscow over the Ukraine crisis and keen
to reduce its energy reliance on Russia, had raised objections
to the $40 billion South Stream pipeline, which was to run under
the Black Sea and enter the EU via Bulgaria.

Critics of the plan said they believed it breached EU law,
but some EU member states saw the pipeline, which would bypass
Ukraine, as the best way to secure their own gas supplies and
economic interests and still hope it can be revived.

"We need to examine all legal questions surrounding the
South Stream project and then use these to move discussions
forward with Russia," Merkel said after talks with Bulgarian
Prime Minister Boiko Borisov in Berlin.

Numerous contracts have already been agreed and it is
important for both sides to remain reliable partners, she added.

Borisov said after meeting Merkel he was convinced that the
problems could be resolved and he hoped to receive clarification
from Brussels on its views about the pipeline.

"We think the Russian and Bulgarian partners must continue
on a legal basis, otherwise we would violate the contract, which
was signed with Bulgaria rather than with the EU as a partner in
2006," he said.

Russian President Vladimir Putin surprised Europe with his
announcement during a visit to Turkey on Dec. 1 that Moscow was
scrapping South Stream, citing the EU objections as the reason.

Putin accused the EU of denying Bulgaria, heavily dependent
on Russian gas, its sovereign rights and said that blocking the
project "is against Europe's economic interests and is causing
damage".

Other countries which stood to gain from South Stream,
including Serbia and Hungary, also want to rescue the project.

Putin said Russia could instead build a gas hub at the
border between Turkey and Greece to pump gas to southern Europe.

The South Stream project was meant to supply 63 billion
cubic metres of gas a year to Europe.

Putin's decision to shelve South Stream and to court non-EU
member Turkey comes after Western countries slapped economic
sanctions on Russia over its actions in Ukraine.